- DOE inventories -1.1M vs -0.5M exp and 3.3M prior
- Oil pops higher in the initial reaction
- Oil.WTI hits 3-year high above $68/barrel
A larger than expected drawdown in the weekly DOE inventory report for crude oil has supported the price of both Oil and Oil.WTI, with the latter hitting its highest level in over 3 years since the release. The headline reading of -1.1M was below the -0.5M expected and similar to the API number released last night. Compared to the prior print of +3.3M it is a notable drop and the strong run higher in this release seen in recent months appears to at least have been halted with the last few data points.
The initial reaction has been positive for Oil.WTI with price jumping around 70 ticks in the 5 minutes following the release. Source: xStation
Taking a closer look at the report there are further positives for the oil price in some of the components. Both Gasoline and Distillate readings were sharply lower on both their consensus forecast and also their prior print.
- Gasoline: -3.0M vs +0.5M exp and +0.5M prior
- Distillate: -3.1M vs -0.4M exp and -1.0M prior
The move above the $68 a barrel mark for Oil.WTI has attracted some headlines with the market building on last week’s gains to post a new 3-year high. Following a recent period of consolidation the market could now be set to push higher once more with little by the way of swing support overhead. Other fundamental developments in the market seem to favour higher prices with reports earlier suggesting that Saudi Arabia would be happy to see crude rise to $80 or even $100 a barrel. Seeing as the Kingdom is a major oil exporter and also looking to float off its oil assets in the not too distant future this shouldn’t come as too much of a surprise, but the bullish rhetoric could see more longs pile into the market.
Oil.WTI has reached a 3-year high today and there is little by the way of swing resistance overhead. Source: xStation